Beer Board vs. Michael's: Is Deal In The Works?

Knoxville (WVLT) - Once again, a Knoxville restaurant and nightclub has gotten more time to fight for its beer permit.

Police and state investigators allege that Michael's in Bearden, has sold beer or liquor to minors at least a dozen times in the last five years and over-served more than three dozen customers, later arrested for driving drunk.

But sources tell Volunteer TV News' Gordon Boyd that the city is considering proposals that would allow Michael's to keep serving.

Michael's owners won't talk about any deal. City officers aren't returning phone calls. But sources say an answer, yay or nay, could come before Halloween.

After a quarter century, Michael's is more than a marquee investment.

Sources say its owners are stressing its impact on Knoxville's bottom line.

Specifically, the taxes it pays on business, property, alcohol and payroll.

And its contributions to charity and community, both direct dollars and in-kind donations.

The owners say they can't give us those, they're still crunching them.

But sources say they're pledging to do more, on all fronts, including under-writing a campaign aimed at preventing under-age drinking.

"Whether we could do something right now remains to be seen, and I'm not sure that we could, but we'd be very disappointed in the city to strike any deal with Michael's right now," says attorney Don Bosch.

Don Bosch's client is suing Michael's for $10 million.

One of two wrongful death lawsuits, filed after 20-year-old Michael Hatcher drove drunk and died wrecking his SUV.

The lawsuits claim Michael's served sold him alcohol, knowing he was too young, and already intoxicated.

"Our investigation certainly tends to show that there are a variety of violations, many of which are public record, that Michael's has committed as it relates to their responsibilities as a server of alcohol," says Bosch.

The head of East Tennessee's Chapter of Mothers Against Drunk Driving says she needs more time to research this issue.

The Beer Board delayed today's hearing on Michael's until next Thursday.

Again, no word from either side what might be a deal maker or breaker.

What is not on the table, we understand, is any proposal to sell Michael's to one of its shareholders not listed as the beer licensee.